Opinion

KU business school’s use of fees questioned

By
Boone Bradley, David Cantrell, Andrew Carlson and Tim Metz - Kansas University School of Business graduate students

July 26, 2010

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The Kansas University School of Business has collected more than $31 million over the last six years in differential tuition funds, and on an annual basis, this revenue source accounts for 40 percent of the school’s operating budget. Over the last five months, students have begun asking questions as to how these funds have been spent and, in a search for answers, have met with administrators at every level of the university. Multiple requests for budgets and an accounting of differential tuition have been submitted and while documents have been exchanged there are still far more questions then answers.

The lack of information provided in regards to differential tuition by Dean William Fuerst and the administration of the university compelled students to file a Kansas Open Records Request. The university responded by stating that it would cost $61,000 to provide answers as to where the differential tuition dollars students had voluntarily decided to pay were going.

The Differential Tuition Agreement provides explicit detail on how all differential tuition dollars should be spent and how these expenditures should be supervised, stating that all expenses should “directly” benefit students. Differential tuition was originally supported by the student body because the administration promised to give students oversight of how the funds were spent and to provide detailed financial reports of differential tuition expenditures to all students twice a year. Differential tuition was passed to improve the stature of the school, and the quality of students that attend. For example, one of the agreement’s goals was for the school to be a top 25 business school. While the school was ranked 28th in U.S. News and World Report in 2009, this year the school has fallen off the list entirely.

Regardless of how the administration spins it, several facts remain:

The current administration has lost vital international programs such as CIBER, GRIP, and CIMBA due to inaction. KU is the first and only incumbent institution in the nation to not be renewed for the CIBER program.

The differential tuition advisory committee was disbanded in 2006 and the required semi-annual financial statements and electronic reports to students discussing these financial statements have not been completed since the inception of differential tuition.

Differential tuition was to be indexed to the Higher Education Price Index (HEPI), which over the last decade has ranged from 2-3 percent annually. However, differential tuition has increased at a flat 6 percent annual rate, and no one can provide documents explaining why this shift occurred.

The differential tuition agreement provided that 7.5 percent or $225,000 of the original $3 million budget be dedicated to scholarships. However, the most recent fiscal year shows only $286,000 dedicated to financial aid out of a total budget of $7.1 million. According to the agreement, the fund should now be at $532,000.

Based upon information pulled from university operating budget records, individuals previously paid by state funds have been switched over to differential tuition funds. Thirty-seven of the 65 individuals employed by differential tuition since its inception have been non-faculty employees and, in the FY 2010, over $1.8 million of differential tuition funds were budgeted for miscellaneous expenses within the administrative division of the school. The agreement explicitly states that DT funds were not to be used to pay current faculty.

In 2010, Dean Fuerst and Associate Dean Keith Chauvin are budgeted to be paid salaries of $308,000 and $214,000, respectively. According to the AACSB salary survey, these salaries rank among the highest paid for their positions in the nation. In 2009, the mean salaries for a dean and associate dean on a national basis was $208,000 and $156,000, respectively. Salary levels at the 75th percentile for dean and associate deans were $244,700 and $175,600, respectively. School of Business professors are paid salaries at the published median point.

Success for us will be a complete restoration of transparency and integrity to the School of Business that has been sorely lacking for several years. We also want to be assured that those who follow in our footsteps will have a quality program to attend. There are many great professors within the School of Business who have worked hard for years to build a program with a solid reputation. Although unsolicited, some of those same professors have come out openly in support of our efforts. We hope that other faculty members find the will to do the same. The current administration’s efforts amount to nothing more than laying waste to years of concerted hard work by dedicated professionals.

We believe that differential tuition funds are not being used to the best of their ability, especially when one can observe the lack of forward progress at the school. The sole purpose of differential tuition was to improve the stature of the school and the experience of students that attend it. Since the collection of these funds began, the school’s national ranking has declined significantly and its admission standards now languish near the bottom of the Big 12. We believe that a comprehensive external audit of the School of Business is warranted given the lack of oversight that has occurred in recent years.

Of all of the programs at KU, the School of Business should be a model of accountability and financial stewardship. This has not occurred under Dean Fuerst’s tenure, as such, we have no confidence in his leadership abilities.

Performance should be the indicator of such high pay. Based upon what has been in the various outlets, lack of performance is exactly the problem. As I read the article above, both the Dean and Associate Dean are paid at the top of their tiers and they are managing a program that in many ways appears to be going in the wrong direction. That doesn't seem like the circumstances in which a pay increase is warranted.

I suspect the AACSB salary survey included many smaller, less research oriented schools. A better comparison of salaries would be among peer group institutions. How do the Business School salaries compare in the Big 12?

Those are nice talking points, but the fact is that he makes more than all of the other Deans and, until the new Chancellor arrived, he made more than Hemmenway. And most of the really small schools are not AACSB accredited or are prestigious, private, and probably pay well. Your argument holds no water and a comparison with the rest of the Big 12 would also indicate that the Dean and Associate Dean are overpaid relative to their accomplishments.

I was discussing just this thing yesterday with my in-laws as we were talking about my husband's tuition. I also work with a number of people who take business courses at KU who are wondering where the several hundred extra dollars per business class go - they say it's certainly not toward facility improvements or technology upgrades.

The response of, "It will cost $61,000," to an open records request seems like nothing more than a smoke screen to cover up the fact that, though there may be nothing wrong going on, there's certainly something not right going on.

Given their reluctance to be transparent and forth-coming, an audit does seem to be in order.

This is a well written editorial and these students should be commended for their research and for standing up for what is right. In addition to poor accountability and fleecing of students, it is widely speculated throughout the entire university that there is a pattern of cronyism and ill advised hiring practices within this department, including hiring people for highly paid positions without doing competitive interviews. This situation not only requires a full independent accounting audit, but also a full management audit of hiring and pay practices.

I can't wait to see Dean Fuerst's response which I am sure he is hurried trying to rush to print. My comment to the Dean would be, if you are going to just republish the same garbage you have been continuously sending out to the faculty as well as publishing in the various media sources since this whole thing began, don't bother. Your excuses for your performance short comings are getting really tired and stale. You simply have not done your job and now is not the time to start trying to pull rabbits out of your hat. At the end of the day, you have received and spent what appears to be $31 million dollars of public funds. How you spent them is absolutely all of our business and its your duty to provide this information if and when asked. Why you can't immediately and comprehensively account for total expenditures over the period in question is appalling and if any one thing should cause the termination of a business school dean, this is it. Obviously the Provost's office and the financial unit are not watching you very closely. Sounds like the students are doing the job of the people who are actually paid keep an eye on these things. What makes this even more insulting is the fact that they are also the one's paying the tuition that you can't account for.... go figure!

As an engineering student, I know that our fees go towards various research labs, computer labs, and our career services. I am generally pleased with these services.

I know from friends in the school that business has computer labs and career services but what else to justify this difference? That totals $300 extra per 3 credit hour course. This doesn't seem right.

From an earlier story:
"In 2010, Dean Fuerst and Associate Dean Keith Chauvin are budgeted to be paid salaries of $308,000 and $214,000, respectively. According to the AACSB salary survey, these salaries rank among the highest paid for their positions in the nation. In 2009, the mean salaries for a dean and associate dean on a national basis was $208,000 and $156,000, respectively. Salary levels at the 75th percentile for dean and associate deans were $244,700 and $175,600, respectively. School of Business professors are paid salaries at the published median point."

This, along with KU School of Business falling out of the national rankings.